Product Analytics can help improve your E-commerce Conversion Funnel

E-commerce companies usually measure their success in terms of their revenue goals. However, the revenue helps just the company. For a company to be successful and always be on top of their target audience’s mind, it is imperative to close the loop and think about the complete decision making, buying, and post-purchase experiences.

Traditionally, an e-commerce funnel refers to how many users enter the funnel by landing up on the website/app via-à-vis how many end up reaching the bottom of the funnel by successfully making a purchase. In reality, the user journey is a bit more complicated. Some customers land upon the products through a search engine, others end up using the myriad of filters and sorting options to zero in on what they want, while there are others who simply abandon the portal since they couldn’t find any exciting offers.

To drive customers through your funnel, one needs to understand how these behaviors and experiences impact their likelihood to purchase and nudge more users along the winning paths.

What is an E-commerce Conversion Funnel?

The idea behind the conversion funnel is the funnel metaphor that illustrates the gradual decline of the number of potential customers as they are guided through the conversion path. The e-commerce conversion funnel is a representation of the stages online shoppers pass through on their way to completing a purchase.

Awareness

This is the first step of the conversion funnel where people will learn about the brand. The target audience is attracted by increasing the platform’s visibility across multiple channels — both online and offline. This is usually achieved using advertisements, social networks, content marketing etc. Determining the sources that are currently driving most of the quality traffic will help platform owners make better-informed decisions about which tactics are most effective.

Interest

This indicates that the platform/product has the customer’s attention. It can easily be identified by users who land up on the website and start browsing the products and perform search queries. At this point, engaging content, irresistible offers, and visually striking design will prove to be very handy at this stage. It could also be useful to experiment with some baiting tactics like asking for an e-mail ID in exchange for discounts. Suggesting the users to subscribe to newsletters is another great way to build interest.

Desire

The next natural step is to build trust and desire and help your prospects learn more about your brand and products. Visitors that reach this funnel stage are considered highly qualified leads and need to be nurtured to move down the funnel. Email workflow campaigns that are designed to deliver targeted, personalized content are a reliable technique to keep prospects engaged and coming back to your website.

Action

This is the heart of the matter, the final, crucial step of your sales funnel. By this step, your visitors have passed through the conversion funnel and have begun engaging with your brand (they’ve downloaded something, subscribed to something, or even called someone). Now, your goal is to convince your prospects to convert by purchasing something or completing another desired action. If a lot of visitors churn at this stage, it indicates that your lead nurturing tactics are in poor shape.

What’s wrong with this funnel?

The problem with this type of analysis, however, is that a real customer journey is much more complicated. Many of your users won’t follow a linear progression through the funnel—they’ll enter and exit at different stages or skip some steps entirely. Generic marketing analytics can tell you how many users drop off at each stage, but they can’t tell you much about the customer experience. They can’t give you insights that are detailed enough to figure out why a customer churns or help you ask and answer other questions about user behavior.

Product analytics provides a complete picture of the user experience at each stage of the funnel, not just on which variation of an A/B test led to more revenue. Specifically, it allows you to ask and answer powerful questions about your customers, such as:

• Is this a first-time user or a repeat user?
• Have they made purchases, received offers, or been shown an experiment?
• Have they performed any other important behavior in this session or any previous session?

Optimization of the E-commerce Conversion Funnel

Marketing & Engagement Campaigns

Your marketing and engagement campaigns take place at the top of the funnel, at the awareness or attribution stage. Using product analytics at this stage will help you find the campaigns most relevant to each user, based on their individual customer journeys. Attribution questions that should be answered are:

1. What was the very first campaign or attribution channel that drew a user into our product?
2. Do users purchase immediately after seeing an ad?
3. What are the leading indicators of a purchase or drop-off, and which users are showing those leading indicators?

Frequency Analysis

Frequency analysis tells you the number of times an event was performed by an individual user or across a user set. From there, you can identify what aspects of your purchase experience are working well, and where are your friction points for improvement. You can perform this analysis at any stage of the funnel. Questions that should be explored are:

1. How many times did a user view a product before purchasing?
2. Did users check out successfully the first time, or did they have to go through the process multiple times?
3. What is the number of offers a user receives before purchasing?
4. How many times did a user read product reviews before adding an item to their shopping cart?

Conversion Drivers

Conversion drivers are the actions that happen in between steps of the funnel that are correlated (or anticorrelated) with moving to the next step in the funnel. Identifying conversion drivers lets you know what actions to encourage and what problems to fix. Questions that should be explored are:

1. Where are friction points that cause users to drop off?
2. What behaviors are most correlated with purchases?
3. What behaviors are most correlated with drop-off?

Experiment with Behavioral Cohorts

You are likely running lots of experiments on your ecommerce website simultaneously, A/B testing different landing pages, product photos, and more. You can increase the impact of these experiments by creating behavioral cohorts. Cohorts are groups of users who share a characteristic—in this case, they were shown the same experiment on your website.

Questions answered by cohorting:

1. What website experiment groups does a particular user belong to?
2. What are the purchase rates for users within a given experiment group?
3. What is the impact of each experiment on goals such as viewing items, purchasing, and becoming a long-term customer?

You can improve each cohort’s experience on your website by analyzing their user history and preferences, sending them specialized offers or making new product suggestions. You’ll also be able to see which experiments improved the customer experience and then replicate that success with more users.

Mapping your customer’s journey to the ecommerce funnel is a great way to recalibrate your digital marketing strategies.

Too often we see jarring changes between building awareness and increasing consideration. This disunity in an ecommerce strategy can hurt your conversion rates, but by creating marketing strategies with your sales funnel in mind, you can create a seamless journey that works to propel your potential customer into not only an existing customer but a returning customer.